Daniele Bernardi AMA
Here is Daniele's bio
Hi Daniele how do you feel regarding recent EU stricter rule on crypto market and how would it effect rest of the world
For my point of view, some rules are necessary to regulate the crypto markets, to avoid the scammer and the thefts that are using the anonymity and the features of the blockchain to stole money from the newcomers; the Swiss Market regulator Finma is acting great for my point of view and this is good for other regulator to follow the Swiss example
Thanks Daniele. How do you feel about the Stock to Flow model by Plan B?Other than Bitcoin, what crypto have you modeled price on? What were the results?
S2F model is very nice but it is incomplete; you cannot forecast the price of one commodities or other good, without taking in consideration also the demand; of course if the demand is increasing, the stock to flow can be a valid parameter to understand the scarcity, but for my point of view, the rate of adoption model can be more correct in the coming years; we cannot suppose the price of the bitcoin go to the infinite, of course there is a log-normal curve that describe a not exponential (but more than linear) increase of the price. Actually we didn't analyze other crypto assets, there are to many things to to with Bitcoin at the moment that we are totally focus on it, right now
Hi Daniele. Regardless of what the experts are saying, where do you think the price of BTC will be by the end of year? Can I have some reasoning behind it as well. Thank you!
It is a good question. I used to develop quant model just to avoid replying these very difficult questionsPersonally I hope the BTC will finish the year over 80k, but it is more a hope than a concrete prediction
- you say that Bitcoin (and almost every asset) moves in bubble-burst cycles. what are the best metrics to detect a bubble? what's the odds that $65k was a bubble?
Any assets where the scarcity is not constant, the price can move very quickly, so the price of a crypto assets is decided by the Bid and Ask mechanism. If most of the people is thinking the price will increase in the coming months, no one is selling the Bitcoin and the price increase, but when many of the Hodlers consider the price interesting to sell their Bitcoin, the Bitcoin will be no more scarce.
- doesn't the entry of institutional investors, possibly with $1 billion+ orders at $25k and $20k change the dynamics of an eventual bubble burst?
For sure, the still shy entrance of the institution right now can increase the demand of Bitcoin and contain an eventual bubble burst in the future, but if the bubble has to form again in the following months, probably the bottom price could be between $25k and $30k , even without great institutional injections
- what needs to happen to prove the S2F model wrong? why did it miss the recent drop to $28k?
S2F model is very nice but it is incomplete; you cannot forecast the price of one commodities or other good without taking in consideration also the demand; of course if the demand is increasing, the stock to flow can be a valid parameter to understand the scarcity, but for my point of view, the rate of adoption model can be more correct in the coming years; we cannot suppose the price of the bitcoin go to the infinite, of course there is a log-normal curve that describe a not exponential (but more than linear) increase of the price.
- you show that 70% of the wallets have 0.01 BTC or less. should Bitcoin growth be measured by banks/countries adopting it? or is the little guy using $200 daily on Lightning Network more important?
It is a gaussian distribution, most of the wallets own a very small amount of bitcoin, it is true, but what is important is the average per wallet, that is interestingly constant during the time, if considered in BTC, of course is more dynamic if consider in USD, depending of the price of Bitcoin; but this is the intuition that we had, if the amount in USD has a range (between 1600 USD and 10.000USD) you can estimate the capitalization of the bitcoin based on the rate of increase of the number of wallets during the time;
- do you follow exchanges inflows/outflows? what's your take on Bitcoin leaving exchanges recently?
At the end of last month (July) there were a significant amount of Bitcoin that left the exchanges in four days; the amount was 100k BTC, more or less 4 billions, that is a strong movement, usually these movement are a good signal for the following days, indeed the price of Bitcoin increase almost 10% after this movement. This movement was coincident with the increase of the total hash rate that was declining since may 15th.
you say that demand (adoption) trumps scarcity... and I tend to agree. but what are the metrics one should use then? google searches? coinbase users? # of wallets with $1,000+ ?